Execution Copy
THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT
The EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 11, 2000, by
and between Prime Retail, Inc., a Maryland corporation ("Prime"), and the sole
general partner of Prime Retail, L.P., a Delaware limited partnership (the
"Operating Partnership"), and Xxxxxx X. Xxxxxxx (the "Executive"), as amended by
the first Amendment thereto, effective April 2, 2001, and further amended by the
Second Amendment thereto, effective June 6, 2002, is further amended by this
Third Amendment, effective August 12, 2002 in the following respects:
1. Section 2, "Term," of the Agreement is hereby deleted in its
entirety and replaced with the following:
2. Term.
The term of this Agreement, unless earlier terminated in accordance
with the terms of this Agreement, will extend to December 31, 2005
(the "Original Term"); provided, however, that if this Agreement is
not affirmatively terminated by either party, or extended or renewed
for a specific duration in writing by agreement of the parties,
prior to the last day of the Original Term, this Agreement will
continue on a month-to-month basis thereafter (the "Extended Term").
The parties agree to cooperate and discuss in good faith their
intentions with regard to this Agreement's extension or renewal 12
months prior to the end of the Original Term. Notwithstanding the
foregoing, the Company agrees to provide Executive with a minimum of
six months' advance written notice of its intent to terminate this
Agreement during the Original Term or the Extended Term for any
reason other than Cause, in which case the Company shall comply with
the notice requirements of Sections 4(a)(2) and (3) hereof, and
Executive agrees to provide the Company with a minimum of 60 days'
advance written notice of his intent to terminate this Agreement
during the Original Term or the Extended Term for any reason other
than Good Reason, in which case Executive shall comply with the
notice requirements of Section 4(b)(1)(E) hereof. The Original Term
and any Extended Term of this Agreement shall end only following
termination by written notice by the Company or Executive in
accordance with this Section. For purposes of this Agreement, the
terms "Original Term" and "Extended Term" shall herein be
collectively referred to as the "Term."
2. Subpart (B) of Section 4(a)(1) is hereby deleted in its entirety and
replaced with the following:
(B) if such termination occurs during the Original Term, a
termination payment in an amount equal to the product of (x) the
number of full and partial years remaining in the Original Term, and
(y) the sum of (i) Executive's then current Base Salary and (ii) a
bonus payment equal to 100% of the average annual bonus (which term
shall exclude awards received pursuant to the Prime Retail, Inc.
2002 Long-Term Incentive Plan) paid to Executive for the two most
recent calendar years in which he received a bonus, or if no such
bonus payments were made to Executive, a bonus payment equal to 50%
of his then current Base Salary (the sum of the amounts determined
by adding clauses (i) and (ii) is in the aggregate hereinafter
referred to as the "One-Year Pay Equivalent"), and the product of
(x) and (y) shall be payable within thirty (30) days of the
effective date of termination;
Page - (2)
3. The following subpart (E) is hereby added to Section 4(a)(1) of the
Agreement:
(E) all vested but undistributed awards under the Prime Retail, Inc.
2002 Long-Term Incentive Plan, payable to Executive in accordance
with the provisions of that plan.
4. The following subpart (D) is hereby added to Section 4(a)(2) of the
Agreement:
(D) receive all vested but undistributed awards under the Prime
Retail, Inc. 2002 Long-Term Incentive Plan, payable to Executive in
accordance with the provisions of that plan.
5. The following subpart (E) is added to Section 4(a)(4) of the
Agreement:
(E) all vested but undistributed awards under the Prime Retail, Inc.
2002 Long-Term Incentive Plan, payable to Executive in accordance
with the provisions of that plan.
6. Subpart (B) of Section 4(b)(1) is hereby deleted in its entirety and
replaced with the following:
(B) any earned and unpaid bonus(es) otherwise payable to him in
accordance with Section 3(b), and all vested but undistributed
awards under the Prime Retail, Inc. 2002 Long-Term Incentive Plan,
payable to Executive in accordance with the provisions of that plan;
7. The following sentence is hereby added at the end of Section 4(c),
"Death":
In addition, the Executive's estate shall be entitled to receive all
vested but undistributed awards under the Prime Retail, Inc. 2002
Long-Term Incentive Plan, payable to the estate in accordance with
the provisions of that plan.
8. Subpart (2) of Section 4(d), "Termination Following A Change of
Control," is hereby deleted in its entirety and replaced with the following:
(2) a termination payment in an amount equal to two times the
One-Year Pay Equivalent, which amount shall be payable within thirty
(30) days of the effective date of termination; provided, however,
that if Executive has received a milestone bonus under the Prime
Retail, Inc. 2002 Long-Term Incentive Plan the vesting of which was
accelerated pursuant to Section 5.3(a)(iv) thereof but the amount of
which was not reduced pursuant to the last sentence of Section 5.4
thereof (the "Change of Control Accelerated Award"), the termination
payment described in this subpart (2) shall be reduced by the amount
that such Change of Control Accelerated Award would have been
reduced pursuant to the last sentence of Section 5.4 of the Prime
Retail, Inc. 2002 Long-Term Incentive Plan had the termination
payment been due and owing under this Section 4(d) at the time the
Change of Control Accelerated Award was distributed to Executive;
Page - (3)
9. This Amendment may be executed in one or more counterparts which
taken together shall constitute one and the same instrument.
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
PRIME RETAIL, INC., a Maryland PRIME RETAIL, L.P., a Delaware limited
corporation partnership
By: /s/ Xxxxx X. Xxxxxxx By: Prime Retail, Inc.
--------------------
Name: XXXXX X. XXXXXXX Its: Sole General Partner
Title: CHAIRMAN AND CEO By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: XXXXX X. XXXXXXX
Title: CHAIRMAN AND CEO
